November 08, 2010

The Fall of a CSR Hero & What this Implies to #sustainnow

It was a challenge this weekend to try to make sense of what Jeffrey Hollender's departure from Seventh Generation represents. It inspired in me some thinking that was completely unexpected and actually resulted in my completing a draft chapter for my book, Tales of Meaningful Use.

Background for this Post

By the end of the weekend, Bernie Kelly, my partner in Melbourne AU, read the draft and we took some time on Skype to look at the implications of what I wrote in this book chapter to the current stage of our progress to convene the WeCareHealth Community in Australia. As a result of my conversation with Bernie, we decided that the draft chapter as written now is something we wanted to have reviewed by the people who are forming into our global alliance advisory group and our launching partners for our project in Australia.

I shared this draft chapter with numerous people I turn to for advice before the end of the weekend. It became clear that this draft chapter was a valuable piece of work that could leverage a dialogue of relevance for Seventh Generation that I want to give much greater thought to. Bernie Kelly and I have decided to do just that and mapped out a process for the chapter review that we will be acting on beginning next week to incubate our next stage of work and action research with people we trust.

This important question helped me see how the draft book chapter I wrote shed light on Jeffrey Hollender's departure.

1. Can Anyone Replace Jeffrey Hollender?

After I completed my "business analysis" of the implications of the Board's resolve to let go of Jeffrey Hollender, I thought back to two years ago when a very important person in my life, Rabbi Alan Lew, went for a jog at a rabbinical retreat where he was teaching in Baltimore and fell to the ground dead. His heart had finally given out. Alan was a very important person in my life, like Jeffrey Hollender is to many people I know in CSR. I happened to be in San Francisco the day Alan died, where I had lived for 10 years. So I joined his congregation and very sizeable personal network of people for a week to celebrate Alan's life.

A few years before Alan passed away, he had decided, like Jeffrey, to start a transition in his congregation and prepare them for a new congregational leader. Alan's talent and capacity as a human being related to spirituality, social justice and hospice had woven into his life a demand on his time from an international audience that was hard to tend to while tending to the needs of his local congregation in San Francisco where he lived.

The first rabbi hired to replace Alan failed and was fired. A search for a second rabbi took considerable time and I had occasion to talk to to two of the candidates that did not end up with an offer. In the Jewish Community it has been a repeated pattern that when a "beloved rabbi" transitions into retirement or moves on to a respected global role, the rabbi that is hired to replace the "beloved" rabbi lasts less than a year.

I actually know a "beloved rabbi" that was hired away from a congregation in the Southeast US and brought to replace another "beloved rabbi" in Southern California. So after serving one congregation flawlessly for 25 years, this rabbi was rejected by a new congregation in one year.

As I thought of this and Jeffrey Hollender, I was left with the question, can anyone really replace Jeffrey Hollender at Seventh Generation?

2. Was Peter Graham behaving like John Sculley at Apple in 1985?

By Tuesday afternoon, I was completely confused by @janmorgan's remark on Twitter: "Jeffrey Hollender gets the boot." The previous week, Seventh Generation had released its annual CSR report. In that report was a letter from Jeffrey and the CEO that had been selected to replace Jeffrey who had also recently left his post at Seventh Generation. What the heck was Jan Morgan talking about?

As the news of Jeffrey's departure leaked into digital ink on the Web, I found a blog post from @marcgunther on the “sad and shocking news”. This was the first report I could find about the incident that was grounded in some fact and contained a message from the Chairman of the Board, Peter Graham, who described Jeffrey's departure and the current goals of the company. Peter Graham is a friend of Hollender's dating back to childhood. Hollender's wife is also a significant shareholder and board member. One could only imagine the kind of tension this implies.

As I read the detail offered by Marc, this situation reminded me of the episode of change at Apple when John Sculley, Apple's CEO recruited from Pepsi, fired the founder, Steve Jobs. Recently, Sculley apologized to Jobs. It is now 20 years past this episode. It made me wonder: As years pass, what will shape from this episode in the story of Seventh Generation?

I have been a follower of the Apple story back to its founding. I became an even more serious follower when Jeffrey Pfeffer, faculty at Stanford Business School, summarized his analysis of the cost to Apple of hiring Sculley as CEO and Sculley then firing Steve Jobs. Pfeffer’s book, The Human Equation, provided a remarkable analysis of the cost and impact of this change within cycles of ups and downs at Apple.

There had been rumors of a growing tension between Chuck Maniscalco and Jeffrey. Like Sculley, Maniscalco has a Pepsico background as a President of a $10 billion division of Pepsico. This made me wonder if Maniscalco was acting as Sculley did, driving a company with a story and history of leadership and product excellence into the ring of operation dominated by brand and advertising operations?

I did a bit of a check-in and thought about other CEOs pushed out of service, e.g. HP's Marc Hurd, Carly Fiorina and Disney's Michael Eisner, and the rocky times those transitions created for these companies. Then I thought about a CEO who was not managed by his board and stakeholders, who led a very healthy company into decline and near death, Ken Olsen. Ken was founder and CEO of Digital Equipment Corporation.

3. What do these CEO departures have in common?

By week's end, Elaine Cohen’s post in support of Jeffrey offered an emotionally mature view from the position that as an outsider looking in, we may never know the real story. Her post also offered a very human side from the heart that spoke about the Jeffrey's contribution to the world of CSR. Elaine, with a posture of dignified emotional intelligence, expressed her concerns for the implications of this abrupt departure. She summarized her view and what this meant to CSR and Seventh Generation, its future, its performance and its moral, ethical and stand on transparency.

After reading Elaine's post, I ran into a couple I am friendly with at Whole Foods Market on Saturday morning. The two were taking a morning to relax with no plans. They were both exhausted. The previous day, my woman friend had lived through a pink slip session at Genzyme of 100 layoffs. Her life-partner told me they were were both vegging and he was going to cook and pamper her the entire weekend.

My woman friend currently works in a company that is going through the stress of change. If you read reports about Genzyme in the paper, the problems with the bad performance of the CEO, Henri Temeer, and the harm to Genzyme's reputation and performance have been spiralling since 2009. The Board went through a period of tension without being aligned, and now in light of the Sanofi bid to purchase Genzyme the board is aligned on one thing and one thing alone: The estimated share value of $89.00 they want from the sale of the company.

By the time I got home, I thought: Seventh Generation is not for sale like Genzyme, it is not being acquired, it is positioned for growth, its products continue to be relevant more than before. But the Founding CEO, the Board members and a short-term CEO, now candidate for the next generation of leadership, are all at odds and brought Seventh Generation into a transition grounded in a form of conflict—and that can result in harm.

4. What about the people?

Whatever I think of Jeffrey Hollender, Peter Graham or anyone in their networks of outreach, at this time, I am left with the same question Elaine and Aman asked at the end of the BSR conference: What about the people?

As a person more mature in years and age with a history of experience in the generation of CSR and Sustainability as a global practice, I have lots of opinions, stories and more. Some of them are now in my new book chapter.

In writing my book chapter, I concluded, as I often do with any project I work on: How has the leader I am writing about altered the lives of the people this person worked with, and what does his absence imply to these people?

My first answer is this. My hope and prayer for Seventh Generation is that the many competent people who served with Jeffrey to build Seventh Generation as a company of "sustainable excellence" do not have to suffer from a rocky transition that harms their capacity and ability to continue to work wisely to sustain personally, for their families and communities of residence.

In my own career experience that drew me to help contribute to the formation of sustainability and CSR as a practice, I simply have seen too much harm to the hard-working people. I hope 10 years from now, I won't be writing a case study similar to what Jeffrey Pfeffer wrote about Apple in his book The Human Equation.

Just as I am a follower of the Story of Seventh Generation, I have been a follower of the Apple story back to its founding. I became an even more serious follower when Jeffrey Pfeffer, faculty at Stanford Business School, summarized his analysis of the cost to Apple of hiring Sculley as CEO and Sculley then firing Steve Jobs. Pfeffer’s book, The Human Equation provided a remarkable analysis of the cost and impact of this change within cycles of ups and downs at Apple.

In my experience it is simply difficult for the "good people," who represent all the stakeholder groups that surround a company, to maintain and leverage from the good work they do in an environment of conflict where there has been an abrupt leadership change as a result of conflict within the board or with potential investors carving out a new stage of business for a company.

5. Serving and sustaining the future.

While I don't always agree with Jeffrey and his approaches within his closest network of colleagues, Jeffrey and I are aligned on the one thing that brought me to CSR in 1993 and led me to form WorkEcology Thought Leadership.

Like Jeffrey, I became committed to creating organization, business and economic forums that would serve seven generations forward. I wanted this personally to move beyond the harm my daughter and I experienced with millions of others from the abrupt changes imposed on us in Massachusetts during Digital Equipments's late 80's decline, followed by a very harmful recession cycle in Silicon Valley in the early 1990's. This harm imposed on millions in both California and Massachusetts became the dress rehearsal for the global chaos of 2008 and the worst two economic years in the United States, worse than the Great Depression.

The reign of a founder is often challenged when it is time to steer a course that is new and different. Only the passage of time will help the CSR world understand what the change in leadership at Seventh Generation implies, and if Peter Graham will be apologizing to Jeffrey Hollender 20 years from now.

Perhaps both men will find a new form of friendship, or both come to recognize they are both setting out to engage a new form of learning that is not based on Seventh Generation's success of the past. Any company, no matter how innovative, has to face change. This rings true for Seventh Generation and all the people associated with the company. A strategic framework will have to be shaped for all people working with Seventh Generation to allow them to work wisely, live well and sustain.

Comments

It was a challenge this weekend to try to make sense of what Jeffrey Hollender's departure from Seventh Generation represents. It inspired in me some thinking that was completely unexpected and actually resulted in my completing a draft chapter for my book, Tales of Meaningful Use.

Background for this Post

By the end of the weekend, Bernie Kelly, my partner in Melbourne AU, read the draft and we took some time on Skype to look at the implications of what I wrote in this book chapter to the current stage of our progress to convene the WeCareHealth Community in Australia. As a result of my conversation with Bernie, we decided that the draft chapter as written now is something we wanted to have reviewed by the people who are forming into our global alliance advisory group and our launching partners for our project in Australia.

I shared this draft chapter with numerous people I turn to for advice before the end of the weekend. It became clear that this draft chapter was a valuable piece of work that could leverage a dialogue of relevance for Seventh Generation that I want to give much greater thought to. Bernie Kelly and I have decided to do just that and mapped out a process for the chapter review that we will be acting on beginning next week to incubate our next stage of work and action research with people we trust.

This important question helped me see how the draft book chapter I wrote shed light on Jeffrey Hollender's departure.

1. Can Anyone Replace Jeffrey Hollender?

After I completed my "business analysis" of the implications of the Board's resolve to let go of Jeffrey Hollender, I thought back to two years ago when a very important person in my life, Rabbi Alan Lew, went for a jog at a rabbinical retreat where he was teaching in Baltimore and fell to the ground dead. His heart had finally given out. Alan was a very important person in my life, like Jeffrey Hollender is to many people I know in CSR. I happened to be in San Francisco the day Alan died, where I had lived for 10 years. So I joined his congregation and very sizeable personal network of people for a week to celebrate Alan's life.

A few years before Alan passed away, he had decided, like Jeffrey, to start a transition in his congregation and prepare them for a new congregational leader. Alan's talent and capacity as a human being related to spirituality, social justice and hospice had woven into his life a demand on his time from an international audience that was hard to tend to while tending to the needs of his local congregation in San Francisco where he lived.

The first rabbi hired to replace Alan failed and was fired. A search for a second rabbi took considerable time and I had occasion to talk to to two of the candidates that did not end up with an offer. In the Jewish Community it has been a repeated pattern that when a "beloved rabbi" transitions into retirement or moves on to a respected global role, the rabbi that is hired to replace the "beloved" rabbi lasts less than a year.

I actually know a "beloved rabbi" that was hired away from a congregation in the Southeast US and brought to replace another "beloved rabbi" in Southern California. So after serving one congregation flawlessly for 25 years, this rabbi was rejected by a new congregation in one year.

As I thought of this and Jeffrey Hollender, I was left with the question, can anyone really replace Jeffrey Hollender at Seventh Generation?

2. Was Peter Graham behaving like John Sculley at Apple in 1985?

By Tuesday afternoon, I was completely confused by @janmorgan's remark on Twitter: "Jeffrey Hollender gets the boot." The previous week, Seventh Generation had released its annual CSR report. In that report was a letter from Jeffrey and the CEO that had been selected to replace Jeffrey who had also recently left his post at Seventh Generation. What the heck was Jan Morgan talking about?

As the news of Jeffrey's departure leaked into digital ink on the Web, I found a blog post from @marcgunther on the “sad and shocking news”. This was the first report I could find about the incident that was grounded in some fact and contained a message from the Chairman of the Board, Peter Graham, who described Jeffrey's departure and the current goals of the company. Peter Graham is a friend of Hollender's dating back to childhood. Hollender's wife is also a significant shareholder and board member. One could only imagine the kind of tension this implies.

As I read the detail offered by Marc, this situation reminded me of the episode of change at Apple when John Sculley, Apple's CEO recruited from Pepsi, fired the founder, Steve Jobs. Recently, Sculley apologized to Jobs. It is now 20 years past this episode. It made me wonder: As years pass, what will shape from this episode in the story of Seventh Generation?

I have been a follower of the Apple story back to its founding. I became an even more serious follower when Jeffrey Pfeffer, faculty at Stanford Business School, summarized his analysis of the cost to Apple of hiring Sculley as CEO and Sculley then firing Steve Jobs. Pfeffer’s book, The Human Equation, provided a remarkable analysis of the cost and impact of this change within cycles of ups and downs at Apple.

There had been rumors of a growing tension between Chuck Maniscalco and Jeffrey. Like Sculley, Maniscalco has a Pepsico background as a President of a $10 billion division of Pepsico. This made me wonder if Maniscalco was acting as Sculley did, driving a company with a story and history of leadership and product excellence into the ring of operation dominated by brand and advertising operations?

I did a bit of a check-in and thought about other CEOs pushed out of service, e.g. HP's Marc Hurd, Carly Fiorina and Disney's Michael Eisner, and the rocky times those transitions created for these companies. Then I thought about a CEO who was not managed by his board and stakeholders, who led a very healthy company into decline and near death, Ken Olsen. Ken was founder and CEO of Digital Equipment Corporation.

3. What do these CEO departures have in common?

By week's end, Elaine Cohen’s post in support of Jeffrey offered an emotionally mature view from the position that as an outsider looking in, we may never know the real story. Her post also offered a very human side from the heart that spoke about the Jeffrey's contribution to the world of CSR. Elaine, with a posture of dignified emotional intelligence, expressed her concerns for the implications of this abrupt departure. She summarized her view and what this meant to CSR and Seventh Generation, its future, its performance and its moral, ethical and stand on transparency.

After reading Elaine's post, I ran into a couple I am friendly with at Whole Foods Market on Saturday morning. The two were taking a morning to relax with no plans. They were both exhausted. The previous day, my woman friend had lived through a pink slip session at Genzyme of 100 layoffs. Her life-partner told me they were were both vegging and he was going to cook and pamper her the entire weekend.

My woman friend currently works in a company that is going through the stress of change. If you read reports about Genzyme in the paper, the problems with the bad performance of the CEO, Henri Temeer, and the harm to Genzyme's reputation and performance have been spiralling since 2009. The Board went through a period of tension without being aligned, and now in light of the Sanofi bid to purchase Genzyme the board is aligned on one thing and one thing alone: The estimated share value of $89.00 they want from the sale of the company.

By the time I got home, I thought: Seventh Generation is not for sale like Genzyme, it is not being acquired, it is positioned for growth, its products continue to be relevant more than before. But the Founding CEO, the Board members and a short-term CEO, now candidate for the next generation of leadership, are all at odds and brought Seventh Generation into a transition grounded in a form of conflict—and that can result in harm.

4. What about the people?

Whatever I think of Jeffrey Hollender, Peter Graham or anyone in their networks of outreach, at this time, I am left with the same question Elaine and Aman asked at the end of the BSR conference: What about the people?

As a person more mature in years and age with a history of experience in the generation of CSR and Sustainability as a global practice, I have lots of opinions, stories and more. Some of them are now in my new book chapter.

In writing my book chapter, I concluded, as I often do with any project I work on: How has the leader I am writing about altered the lives of the people this person worked with, and what does his absence imply to these people?

My first answer is this. My hope and prayer for Seventh Generation is that the many competent people who served with Jeffrey to build Seventh Generation as a company of "sustainable excellence" do not have to suffer from a rocky transition that harms their capacity and ability to continue to work wisely to sustain personally, for their families and communities of residence.

In my own career experience that drew me to help contribute to the formation of sustainability and CSR as a practice, I simply have seen too much harm to the hard-working people. I hope 10 years from now, I won't be writing a case study similar to what Jeffrey Pfeffer wrote about Apple in his book The Human Equation.

Just as I am a follower of the Story of Seventh Generation, I have been a follower of the Apple story back to its founding. I became an even more serious follower when Jeffrey Pfeffer, faculty at Stanford Business School, summarized his analysis of the cost to Apple of hiring Sculley as CEO and Sculley then firing Steve Jobs. Pfeffer’s book, The Human Equation provided a remarkable analysis of the cost and impact of this change within cycles of ups and downs at Apple.

In my experience it is simply difficult for the "good people," who represent all the stakeholder groups that surround a company, to maintain and leverage from the good work they do in an environment of conflict where there has been an abrupt leadership change as a result of conflict within the board or with potential investors carving out a new stage of business for a company.

5. Serving and sustaining the future.

While I don't always agree with Jeffrey and his approaches within his closest network of colleagues, Jeffrey and I are aligned on the one thing that brought me to CSR in 1993 and led me to form WorkEcology Thought Leadership.

Like Jeffrey, I became committed to creating organization, business and economic forums that would serve seven generations forward. I wanted this personally to move beyond the harm my daughter and I experienced with millions of others from the abrupt changes imposed on us in Massachusetts during Digital Equipments's late 80's decline, followed by a very harmful recession cycle in Silicon Valley in the early 1990's. This harm imposed on millions in both California and Massachusetts became the dress rehearsal for the global chaos of 2008 and the worst two economic years in the United States, worse than the Great Depression.

The reign of a founder is often challenged when it is time to steer a course that is new and different. Only the passage of time will help the CSR world understand what the change in leadership at Seventh Generation implies, and if Peter Graham will be apologizing to Jeffrey Hollender 20 years from now.

Perhaps both men will find a new form of friendship, or both come to recognize they are both setting out to engage a new form of learning that is not based on Seventh Generation's success of the past. Any company, no matter how innovative, has to face change. This rings true for Seventh Generation and all the people associated with the company. A strategic framework will have to be shaped for all people working with Seventh Generation to allow them to work wisely, live well and sustain.